Gold demand in India firm as jewellers stock up

Gold demand in India, the world's biggest buyer of the metal, remained strong on Thursday as jewellers were restocking for a key festival, though retail demand was weak.

The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.02 percent higher at 30,704 rupees per 10 grams as of 3:21 p.m.

"Retail demand is still weak, but jewellers are restocking for Pongal festival. They are expecting higher sales during the festival," said Daman Prakash Rathod, director with Chennai-based wholesaler MNC Bullion.

People in Tamil Nadu will celebrate Pongal, a popular harvesting festival, in mid-January.

The rupee, which eased on Thursday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Overseas gold inched down in thin trade on Thursday, with investors keeping a close eye on talks between the White House and Congress to prevent the U.S. economy from plunging into recession next year.

The March silver contract on the MCX rose 0.22 percent to 57,600 rupees per kg.